Wednesday, April 26, 2017

Derek Jeter may buy Marlins ... with plenty of help and estate planning.

Giancarlo Stanton signed that contract yesterday. He can opt out but not until year six, which by then may be not such big bucks or may be no bucks if his team, the Florida Marlins, default.Yesterday when I first heard that the contract was back loaded I thought that the Marlins owner was doing estate planning and intended to sell within a few years or until the contract started to benefit the player and not the owner. The owner doesn't care if there are big bucks owed in several years if he does not expect to be the owner when stuff hits the fan...I can see that Stanton had to take all that money. What I don't understand is why he and his representative allowed the team to pay him so relatively little in the first few years.In 2014 Stanton received $6.5 million. In 2015, the first year of the new 13 year contract, Stanton will receive $6.5 million. Say what? Same pay after an MVP quality season. No raise. What the heck?Stanton thinks this will let the team add good players so that they can build a winner. Or it could be that Stanton is being played for a fool. Then Stanton gets $9 million in 2016, then $14.4 million. Then in 2018 at age 28 Stanton starts to receive pay that ranges between $25 and $32 million through 2028, age 38.
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A group including Jeter and Jeb Bush, the former Florida governor and presidential candidate, has reached a tentative agreement to buy the Miami Marlins ...

The Miami Herald reported that the sale price would be $1.3 billion. There are said to be multiple members of the ownership group, but Bush, who failed in his bid to win the 2016 Republican presidential nomination, would apparently be the control person...

Jeter earned more than $265 million in salary over his 20-year career, spent entirely with the Yankees ...The Marlins have been owned since 2002 by Jeffrey Loria, a New York art dealer with a fondness for former Yankees. Loria succeeded in getting a new ballpark built for the franchise in 2012, but the Marlins have been plagued by low attendance and distrust of the ownership by the team’s fans.

While sometimes giving out lavish contracts — including a record 13-year, $325 million deal to the slugger Giancarlo Stanton — Loria has also, at various times, reversed course and slashed payroll with little warning. The Marlins have not reached the postseason since their 2003 championship, and their current playoff drought is the longest in the National League.

Even so, Loria stands to turn an enormous profit if the sale to the Jeter-Bush group goes through. He bought the Marlins for $158 million after Major League Baseball had purchased his previous team, the Montreal Expos, for $120 million and lent him the rest to complete the deal for the Marlins.

Forbes recently valued the Marlins at $940 million, but the reported $1.3 billion price for this deal would be the second-highest ever paid for a baseball franchise, behind only the sale of the Dodgers for $2 billion in 2012.
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This is how at least some of those really long, really expensive contracts can make sense for the team owner.